So I've been trading off and on for a number of years. I feel I have good skills as far as entering and exiting trades, but time and time again, my money management has destroyed my account. This has been true with my poker playing as well. My ability to turn $100 into many thousands in one night has been proven time and time again. I've done it probably 10 times with my biggest score 15K in one night. Of course, the money is quickly or eventually divested by stupidly jumping limits to quickly....from 1/2 NLH to 25/50NLH within a few hours. Poof. Gone. This is absolutely akin to overleveraging in forex.
Two trading stories. 4 years ago, I funded my account with $500. Within several months, I had turned this $500 in to $13,000. I was trading naively with a divergence strategy and overleveraging like mad (400:1). Two months later, the account was gone. Boo hoo. Waaah. Woe is me. Fast forward to last summer...I funded my GFT with $500. 8 weeks and a few hundred trades later, I had $26,000 in my account. I thought I was a genius, blah blah blah. Simple strategies, S/R, trendlines, and very generous stops. So I took out a couple grand (to trade essentially for free) and was left with 23K. I was using GFT's 400:1 leverage and thought it was the greatest thing since Wonderbread. But as I have learned, leverage can be your greatest asset or your worst enemy. Well, you can guess what happened after that. 4 weeks later, my balance was zero. I was so depressed about my stupidity and lack of discipline that I quit trading.....until now. I am starting over but with a new discipline. My main focus is going to be on money management, which is THE KEY to success, as I have learned.
I plan to do the things that I glossed over before. Risk no more than 5% per trade and my leverage will be 20:1, unless the new bill is passed, then 10:1. I am starting anew with OANDA due to their unique policy of allowing you to size your positions any way you'd like. I think that feature is amazing.
So what's my point? Not sure...perhaps to let folks know that it is indeed possilble to prosper in forex, but if managing risk and leverage is not at the absolute forefront of your trading plan, you can kiss that money goodbye. Its the boring stuff that you MUST focus on, not the "system", the latest cool indicator, or TraderJane's amazing "market pick thread". In fact, if you cruise the "Interactive Trading" thread at all, I'll put my money on the fact that you are a losing trader.
That is all.
-Liz
Two trading stories. 4 years ago, I funded my account with $500. Within several months, I had turned this $500 in to $13,000. I was trading naively with a divergence strategy and overleveraging like mad (400:1). Two months later, the account was gone. Boo hoo. Waaah. Woe is me. Fast forward to last summer...I funded my GFT with $500. 8 weeks and a few hundred trades later, I had $26,000 in my account. I thought I was a genius, blah blah blah. Simple strategies, S/R, trendlines, and very generous stops. So I took out a couple grand (to trade essentially for free) and was left with 23K. I was using GFT's 400:1 leverage and thought it was the greatest thing since Wonderbread. But as I have learned, leverage can be your greatest asset or your worst enemy. Well, you can guess what happened after that. 4 weeks later, my balance was zero. I was so depressed about my stupidity and lack of discipline that I quit trading.....until now. I am starting over but with a new discipline. My main focus is going to be on money management, which is THE KEY to success, as I have learned.
I plan to do the things that I glossed over before. Risk no more than 5% per trade and my leverage will be 20:1, unless the new bill is passed, then 10:1. I am starting anew with OANDA due to their unique policy of allowing you to size your positions any way you'd like. I think that feature is amazing.
So what's my point? Not sure...perhaps to let folks know that it is indeed possilble to prosper in forex, but if managing risk and leverage is not at the absolute forefront of your trading plan, you can kiss that money goodbye. Its the boring stuff that you MUST focus on, not the "system", the latest cool indicator, or TraderJane's amazing "market pick thread". In fact, if you cruise the "Interactive Trading" thread at all, I'll put my money on the fact that you are a losing trader.
That is all.
-Liz
There's always money in the banana stand.